Traders on the floor of the NYSE, August 1, 2022.
S&P 500 futures fell on Tuesday after another chipmaker warned about tough times ahead following Nvidia’s poor forecast in the prior session.
S&P 500 futures lost 0.3% as chip shares declined in the premarket. Nasdaq 100 futures fell 0.7%. Dow Jones Industrial Average futures were little changed.
Memory chipmaker Micron warned that revenue may fall short of its prior guidance because of ‘macroeconomic factors and supply chain constraints.” The stock fell nearly 4% in early trading.
It’s been a rough week for chipmakers. On Monday, weaker-than-expected revenue guidance from Nvidia weighed on the group. Nvidia was lower again in premarket trading Tuesday, shedding another 3% after a 6% decline on Monday. The iShares Semiconductor ETF lost 1.5% in premarket trading Tuesday after falling 1.5% on Monday.
During Monday’s regular trading, the S&P 500 slipped 0.12% and the Nasdaq Composite ticked down by 0.1%. Stocks had opened the session higher, but then gave up most of those gains before Monday’s closing bell.
Outside of chips, a pair of Nasdaq-listed stocks were also taking early hits. Novavax slumped 32% in premarket trading after slashing full-year revenue guidance because of poor demand for its Covid vaccines. Upstart declined 13% in premarket trading after the consumer lending company reported second quarter results that missed both profit and revenue expectations.
With the S&P 500 coming off its third consecutive positive week, investors are wondering if this comeback is just a bear market bounce are the start of a new sustained advance.
“I think a retest is likely and investors need to be careful about buying in here,” Morgan Stanley Wealth Management’s Jim Lacamp said Monday on CNBC’s “Closing Bell.” “You should use a rally like this to sell some stuff that you’re trying to get rid of — you know, you don’t want the cheese anymore, you want out of the trap.”
On the economic front, investors are awaiting the latest reading of the July consumer price index, due Wednesday, to find some clarity on the path of interest rate hikes from the Federal Reserve as it works to stamp out inflation, or at least slow it.